At the current churn rate, almost half of the companies on the S&P’s stock exchange will be gone in the next 10 years. Seismic shifts in the marketplace have left organizations with a clear choice: transform at speed or risk total disruption. But as cliché as it sounds, no business is alone. No single company could possibly deliver the complex, ever-changing solutions consumers and society demands year-after-year. Competition has long been the default mode for companies across industries – of course, an element of competition will always be necessary to drive growth. But a growing number of CEOs are now embracing ecosystem business models; building networks of organizations, from competitors to suppliers and government agencies, to deliver products and services. EY Global Chairman and CEO Carmine Di Sibio tells us in a new WEF blog, why the future of competition is collaboration.
2. AI: A pivotal moment for professional services
Like many of us, Andy Baldwin– EY Global Managing Partner – Client Service – has been following OpenAI’s launch of ChatGPT with fascination and joking with his kids on how to best use it. From rewriting the endings to their favorite films, to using it as an inexhaustible source of bad ‘dad jokes’. It’s got him thinking, how will ChatGPT – and similar artificial intelligence (AI) chatbots – impact the professional services industry? “Over the last 40 years we have seen data and technology increasingly integrated with ‘human expertise’” says Andy. “During the COVID-19 pandemic, the industry also developed the capacity to deliver ever more complex projects to clients without setting foot on their premises – a reality unimaginable only 3 years ago.” Professional services’ fee structures are also changing, with client fees increasingly reflecting the costs of data and technology – alongside professionals’ time as business models evolve. Andy tells us more, about why now is a pivotal moment for professional services.
3. Don’t bore us, get to the chorus
Music is changing. And we’re not just talking about the industry as whole, we mean individual songs. Right down to the lyrics and how they are structured. Songs have typically been written in the format of VERSE-CHORUS-VERSE. But music streamers may have spotted a recent and subtle change. An increasing amount of new music is being written as CHORUS-VERSE-CHORUS. Why? Driven by today’s extreme abundance of content and choice, artists know that listeners aren’t likely to continue far beyond the first 15 to 30 seconds of a song. So, they are choosing to bring forward the catchiest part of the song to hook the audience – and get paid royalties for the play. As the volume of music – and information in general – grows, it becomes more expensive to sift through it all to find the information you really need. And as we have seen already in the music industry, this friction can reshape markets in unexpected ways. The future of search is on the horizon, after more than 2 decades of minimal change.
Nicola Morini Bianzino, EY Global Chief Technology Officer, tells us more.
4. ESG at the heart of innovation
The aerospace and defense (A&D) industry is investing heavily in decarbonization — and it’s having a positive impact far beyond reducing the sector’s 2% share of carbon emissions globally.According to the latest EY CEO Outlook, 69% of advanced manufacturing executives are integrating ESG as a core aspect of all their products and using differentiated technologies to boost customer loyalty. Rather than bolting it on as an afterthought, sustainability leaders are putting environmental considerations at the heart of their innovation and product design. And whilst not yet at pre-pandemic levels, demand for air travel has been surging. By improving their operations — the sector can cut flight emissions by about 11%. But that’s just scratching the surface of innovation; alternative fuels could slash 55% of emissions and fully eliminate net CO2 emissions whilst aircraft design and propulsion innovation could cut an estimated 21% of flight emissions. But what else is on the horizon?
5. Is this the demise of the office?
For billions of people worldwide, commuting to and working in an office has long been a staple part of working life. But that all changed in 2020 during the COVID-19 pandemic lockdowns. Today, hybrid work continues to be adopted as a flexible working model across industries – and the impact of decreased demand for office space, particularly among older properties, is producing a ripple effect in the US. Formerly bustling central business districts now look like ghost towns, with a lack of daily commuters to fill downtown office skyscrapers and frequent the restaurants and retail that were built to support them. Governments must subsequently now manage economic losses from a declining tax base – and a growing stock of obsolete, older office properties. So much so, that this has been coined one of the greatest challenges in the history of commercial real estate. But it’s not all doom and gloom. According to the recent EY Future Workplace Index survey, 58% of organizations surveyed are investing in their existing real estate portfolios, even as “work” becomes less of a fixed place and more of a network of connected spaces for productivity. As corporate tenants continue to seek sustainability-minded Class A properties for in-person gatherings, building conversions offer an increasingly attractive solution, with benefits for all parties involved. Cities hold the future of their economic resiliency in their hands – and the time to act is now.